In response to the House of Reps resolution that the CBN should ban the use of dollars for transactions in Nigeria, the CBN has rightly responded by saying it is not a law enforcement agency and therefore cannot ban the use of dollars. CBN Deputy Governor said ”
“The country’s legal tender is the naira and it is therefore illegal to pay for goods and services in Nigeria in foreign currency. Unfortunately, CBN is not a law enforcement agency.”Some of those who do this do so for convenience and that is what the N5, 000 note would have solved.”
I personally have made this argument in the past that in a free market economy banning of goods and services including mode of transaction is only enforceable if the market sees no incentive in breaking the law. People will continue to transact in dollars if they have no confidence in the Naira or the ability of the market to present them with effective opportunities to hedge.
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The CBN’s statement is just to confirm the hyper inflationary trend in the country due to high level corruption and general in- discipline in the society.